India's Artificial Intelligence spending will grow from $300.7 million in 2019 to $880.5 million in 2023 at a compound annual growth rate (CAGR) of 30.8 per cent, said an International Data Corporation (IDC) report on Wednesday.

As per IDC's 2020 COVID-19 Impact Survey, half of India enterprises plan to increase their AI spending this year. However, data trustworthiness and difficulty in selecting the right algorithm, are some of the top challenges that hold organisations back from implementing AI technology, according to the new report titled "India Artificial Intelligence Market, 2020."

The report also explores the businesses' approach across the core AI pillars including, strategy, culture, data, skills, and ethics. "COVID-19 is pushing the boundaries of organisations' AI lens. Businesses are considering investments in intelligent solutions to tackle issues associated with business continuity, labour shortage, and workspace monitoring," said Rishu Sharma, Principal Analyst, Cloud and AI at IDC in India. "Organisations are now realising that their business plans must be closely aligned with their AI strategies."

The latest report provides a market overview including AI spending, end-user adoption plans, the business value of AI investments, and COVID-19 impact. The report also provides insights on evolving end-user plans as they progress on their approach to adopt AI.

"The variety of industry-specific tech solutions supported by emerging technologies like Internet of Things, robotics, Blockchain, etc. are getting powered by complex AI algorithms and are cloud-enabled to reach their max potential," said Ashutosh Bisht, Senior Research Manager for IDC's Customer Insights and Analysis group.

"In India BFSI and Manufacturing verticals are the two biggest spenders of AI across different use cases making almost 37 per cent of the AI spending in 2019."